The crypto markets began the week under selling pressure. Standard Chartered highlighted the long-term risks posed by scalability issues on the Ethereum network, leading to a downward revision of price forecasts. Following the bank’s warnings, Bitcoin and Ethereum ETFs retreated.

The crypto markets, starting the week with a weak performance, faced selling pressure following Standard Chartered’s concerning statements about Ethereum. The bank noted that changes in the Ethereum blockchain could create long-term pressures on scalability, leading to a downward revision of price forecasts. Before the U.S. markets opened on Monday, Bitcoin fell by 0.5% to $83,467, while Ethereum showed a more resilient performance compared to the overall market, trading at $1,914 with a 0.2% increase. The total market value of the crypto market decreased by 0.42% to $2.73 trillion, with the CoinDesk Market Index recording a 3.2% increase in the last 24 hours.

LAYER 2 SOLUTIONS FAILED TO DELIVER EXPECTED BENEFITS Geoffrey Kendrick, head of the digital assets research unit at Standard Chartered, expressed in a note to clients that they expected Ethereum to remain in a long-term downtrend.

Kendrick announced a downward revision of their price target for the end of 2025. Emphasizing that layer 2 solutions developed to increase Ethereum’s scalability did not deliver the expected benefits, Kendrick claimed that the Base layer 2 blockchain developed by Coinbase subtracted approximately $50 billion from Ethereum’s market value.

$68.41 MILLION NET OUTFLOW OBSERVED Declines were also noticed in the ETF markets. Bitcoin-based exchange-traded funds lost value in pre-market trading on Monday. Bitwise Bitcoin ETF and VanEck Bitcoin ETF experienced a 1.5% decline. According to SoSoValue data, a total net outflow of $68.41 million was observed in the 11 funds composed of Bitcoin ETFs on Friday. Ethereum ETFs also painted a similar picture. Bitwise Ethereum ETF lost 1.6% in value, while Franklin Ethereum ETF experienced a 1.4% decline. Data from SoSoValue showed a total net outflow of $35.3 million on Friday in the nine funds consisting of Ethereum ETFs.

Shares trading in the crypto mining sector also started the week with declines. Cango and Canaan lost 1.9% and 1.8% in value, respectively. Meanwhile, Digihost showed a positive divergence with a 1.6% increase. On the other hand, the stablecoin market drew attention with increasing transaction volumes. Tether, the largest U.S. dollar-backed stablecoin, saw its USDT’s trading volume rise by 66% to $59.11 billion in the last 24 hours. The trading volume in Circle’s USD Coin also increased by 84% to reach $6.78 billion.

While concerns about Ethereum and the overall risk perception in the market are expected to continue to put pressure on the crypto markets in the short term, investors will closely monitor developments regarding Ethereum’s scalability issues.